How many credit cards do you have?
Credit cards come in so many shapes and sizes that having one card to do everything can be difficult to achieve, so if you need to move a balance and want to keep your purchase interest to a minimum, you may need more than one card. Is it worth your while getting a low rate credit card to fix the rate even if you don’t use it? Or should you mix and match your deck?
At present, the longest term you can get on a 0% balance transfer card is 31 months with the Barclaycard Platinum ,which has a 2.99% fee to move your balance. But if you need to make a purchase, this will only give you six months at 0% interest.
So a better choice would be to consider a separate 0% purchase card, and the longest term at that level is with the Tesco Clubcard for Purchases credit card, which gives you 18 months at 0%, plus Clubcard points wherever you shop.
Of course, there is always a chance that you will not be able to clear a balance within the offer period, and you can end up spending a lot of time moving balances from card to card. In addition, the more credit cards you apply for, the worse it can look for your credit rating. The worst of all worlds would be if you were refused a card, which can really hit your credit score.
So, an alternative if you prefer to use your time for something other than moving your balances around is to choose a low rate credit card. Unlike the 18%+ standard card rates that you will move to after you have gone past the 0% offer period, these cards have a consistently lower rate, but in most cases you will be charged interest from the off.
The Sainsbury’s Nectar Low Rate card is currently at 6.9% APR, and you will collect four Nectar points for each £1 you spend on your shopping in Sainsbury’s, and one Nectar point for any £5 you spend elsewhere.
The Tesco Clubcard Credit Card with Low Rate is at 7.8%, but offers 0% for three months on balance transfers, and 0% for three months on purchases. In addition, you will collect Tesco Clubcard points wherever you shop.
Choosing a low rate credit card means you will not be hit with such steep interest charges, and it should cost you less to pay off your debt over the longer term. But remember, the rates advertised may not be the rate you are offered, so check all of the small print before you sign up for any credit card.
Written by :
|Alison is a news & research reporter for compareandsave.com.Having worked as a journalist on a number of personal finance websites; she now spends time researching and commenting on UK personal finance stories and investigating new ways to help our readers save money.For press enquiries, please visit our Media Centre page.|